COMMUNITY FOUNDATION FOR MISSISSIPPI

Section III. Findings and Questioned Costs for Federal Awards Finding No. 2021-01 Information on the federal program: CFDA# and title: 21.019 Coronavirus Relief Fund Federal award identification numbers: SLT0069, SLT0019 Name of the federal agency: Department of Treasury Name of the pass-through entity (if applicable): Mississippi Development Authority Criteria: The Foundation was required to establish internal controls, obtain supporting information and review applications from subgrantees in a manner prescribed by the Uniform Community Foundations COVID-19 Grant Program Policies and Procedures (the "Program Policies and Procedures"), as prescribed by the Mississippi Development Authority, to ensure the requested funds were allowable costs with respect to the Program Policies and Procedures, and Section 601(d) of the Social Security Act, as added by section 5001 of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") prior to disbursing federal funds to grantees. Condition: We obtained the listing of expenditures between April 1, 2020 and March 31, 2021 in connection with the Coronavirus Relief Fund award received by the Foundation in 2020. From this listing, we tested a sample of expenditures made to subgrantees, which totaled $372,367. Certain grants tested were made without obtaining supporting information necessary to fully satisfy the requirements of the Program Policies and Procedures totaling approximately $102,000 (the "initial questioned costs"). Additional efforts were undertaken by management in response to these findings to obtain adequate supporting information from applicants to remedy the initial findings. As a result of the additional efforts undertaken, the necessary additional supporting information was obtained for approximately $67,000 of the initial questioned costs. In March 2022, amendments were made to the Program Policies and Procedures, eliminating certain program requirements in which management previously failed to satisfy for several of the disbursements tested in our sample. At the conclusion of the audit, $4,780 of the initial questioned costs could not be supported with the necessary information to support allowability, and as such these are questioned costs. Through our testing, we evaluated 51 grant disbursements. Of the 51 disbursements evaluated, we identified 18 grant disbursements that were made without obtaining adequate supporting information to ensure compliance with the Program Policies and Procedures in plate at the time of each respective disbursement. Accordingly, we believe these control exceptions represent a material weakness in internal control over the major program. Cause: The reviews performed as part of the Foundation's monitoring function failed to properly apply certain provisions of the Program Policies and Procedures. Effect: The Foundation made certain grants without obtaining adequate supporting documentation to evaluate the allowability of costs as outlined in the Program Policies and Procedures. Questioned Costs: $4,780 Auditor's Recommendation: We recommend that the Foundation establish a more robust review procedure over applications to grantees prior to disbursement of funds. The use of a reviewer's checklist or similar review tool that has been aligned to the applicable rules and regulations could assist in preventing the disbursement of funds prior to determining allowability of such costs. The Foundation could also consider enrolling involved individuals in training to further enhance the review procedures. COMMUNITY FOUNDATION FOR MISSISSIPPI, INC. AND SUBSIDIARIES Schedule of Findings and Questioned Costs Year Ended March 31, 2021 6 Section III. Continued Views of Responsible Individuals: The Community Foundation for Mississippi acknowledges the finding of a material weakness in monitoring, but asserts that this weakness was unavoidable, due to the program, its requirements, policies and procedures being in a state of near-constant change. The Foundation also asserts that a disciplined approach and appropriate due diligence was undertaken by staff, however, the process could not adapt quickly enough to satisfy the ever-changing program rules and requirements. Nevertheless, the Foundation takes seriously this finding of a material weakness. See additional information in Management's Corrective Action Plan on page 7.